Live Oak Bancshares Inc.
11/12/2025 | Press release | Distributed by Public on 11/12/2025 15:04
Non-Reliance of Financial Report (Form 8-K)
Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On November 10, 2025, management and the Audit Committee of the Board of Directors (the "Audit Committee") of Live Oak Bancshares Inc. (the "Company"), in consultation with KPMG LLP ("KPMG"), the Company's independent registered public accounting firm, concluded that the Company will amend its 2024 Annual Report on Form 10-K (the "FY2024 Form 10-K") and the Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2025 and June 30, 2025, respectively (collectively, the "Q1 and Q2 2025 Form 10-Qs") to restate the Consolidated Financial Statements for each of the periods included in those filings in order to restate the Statements of Cash Flows and related notes as further described below. The FY 2024 Form 10-K and the Q1 and Q2 2025 Form 10-Qs are collectively referred to herein as the "Prior Filings."
In preparing the Company's Consolidated Statements of Cash Flows for the quarter ended September 30, 2025, an error was identified in the classification of cash flows between operating and investing activities associated with the proceeds received from the sale of loan participations and the related supplemental disclosures of non-cash operating, investing and financing activities related to these loans. The net total of the misclassification had no impact on the Company's reported cash balances as they offset each other, as highlighted in the table below.
The misclassification did not impact the Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Balance Sheets, or Consolidated Statements of Changes in Shareholders' Equity included within the Prior Filings. Further, management concluded that these misclassifications also had no effect on the Company's total cash balances, liquidity measures, total loan cash flow activity, total loans or the classification of loans, the allowance for credit losses, total assets, total liabilities, total shareholders' equity, regulatory capital ratios, net interest income, net interest margin, net income, return on average assets, return on average equity, asset quality ratios or any other key performance metrics, including non-GAAP performance metrics, that the Company routinely discusses with analysts and investors.
However, given the relative size of the misclassification between certain line items in the Consolidated Statements of Cash Flows, management concluded the misclassifications are material. The Company's management, in consultation with the Audit Committee of the Company's Board of Directors, determined on November 10, 2025, that the Company's previously issued Consolidated Statement of Cash Flows within the Financial Statements included in the Prior Filings and the associated reports of the Company's current and prior registered accounting firms should no longer be relied upon. The Company intends to amend the Prior Filings on or about November 17, 2025, to present the restated Consolidated Financial Statements to restate the Statements of Cash Flows and related notes.
Though management believes the misclassifications to the Consolidated Statement of Cash Flows are qualitatively immaterial, management has concluded they are quantitatively material, and as such management has further concluded that a material weakness exists in the Company's internal control over financial reporting with respect to the classification of the Company's participation loan activity cash flows between Operating Activities and Investing Activities in the Company's Statements of Cash Flows. As such, KPMG's report on the Company's internal control over financial reporting as of December 31, 2024, should no longer be relied upon. The Company anticipates this material weakness to be remediated by the time of the filing of the 2025 Annual Report on Form 10-K.
The Company's Audit Committee has discussed the matters disclosed in this Item 4.02 with its current independent registered public accounting firm, KPMG LLP, and management of the Company has discussed the matters with the Company's prior independent registered public accounting firm, Forvis Mazars, LLP.
1
The following table presents the effect this correction is expected to have on the Consolidated Statements of Cash Flows for the periods indicated:
| (Dollars in thousands) | As Previously Reported | Adjustment | As Adjusted | ||||||||||||||
| Selected Cash Flow Data | |||||||||||||||||
| For the Three Months Ended March 31, 2025 | |||||||||||||||||
| Operating activities: | |||||||||||||||||
| Proceeds from sales of loans held for sale | $ | 422,294 | $ | (137,954) | $ | 284,340 | |||||||||||
| Net cash provided (used) by operating activities | 104,977 | (137,954) | (32,977) | ||||||||||||||
| Investing activities: | |||||||||||||||||
| Loan and lease originations and principal collections, net | $ | (524,894) | $ | 137,954 | $ | (386,940) | |||||||||||
| Net cash used by investing activities | (599,264) | 137,954 | (461,310) | ||||||||||||||
| Net increase in cash and cash equivalents | $ | 135,463 | $ | - | $ | 135,463 | |||||||||||
| Supplemental disclosures of noncash operating, investing, and financing activities | |||||||||||||||||
| Transfer of loans held for sale to loans and leases held for investment | $ | 205,385 | $ | (137,370) | $ | 68,015 | |||||||||||
| Transfer of loans and leases held for investment to loans held for sale | 283,718 | (274,740) | 8,978 | ||||||||||||||
| For the Six Months Ended June 30, 2025 | |||||||||||||||||
| Operating activities: | |||||||||||||||||
| Proceeds from sales of loans held for sale | $ | 924,481 | $ | (296,882) | $ | 627,599 | |||||||||||
| Net cash provided by operating activities | 313,146 | (296,882) | 16,264 | ||||||||||||||
| Investing activities: | |||||||||||||||||
| Loan and lease originations and principal collections, net | $ | (984,384) | $ | 296,882 | $ | (687,502) | |||||||||||
| Net cash used by investing activities | (1,084,324) | 296,882 | (787,442) | ||||||||||||||
| Net increase in cash and cash equivalents | $ | 53,955 | $ | - | $ | 53,955 | |||||||||||
| Supplemental disclosures of noncash operating, investing, and financing activities | |||||||||||||||||
| Transfer of loans held for sale to loans and leases held for investment | $ | 408,925 | $ | (295,599) | $ | 113,326 | |||||||||||
| Transfer of loans and leases held for investment to loans held for sale | 610,907 | (591,199) | 19,708 | ||||||||||||||
| For the Three Months Ended March 31, 2024 | |||||||||||||||||
| Operating activities: | |||||||||||||||||
| Proceeds from sales of loans held for sale | $ | 258,708 | $ | (60,725) | $ | 197,983 | |||||||||||
| Net cash provided by operating activities | 90,893 | (60,725) | 30,168 | ||||||||||||||
| Investing activities: | |||||||||||||||||
| Loan and lease originations and principal collections, net | $ | (228,713) | $ | 60,725 | $ | (167,988) | |||||||||||
| Net cash used by investing activities | (278,698) | 60,725 | (217,973) | ||||||||||||||
| Net increase in cash and cash equivalents | $ | 14,854 | $ | - | $ | 14,854 | |||||||||||
2
| (Dollars in thousands) | As Previously Reported | Adjustment | As Adjusted | ||||||||||||||
| Supplemental disclosures of noncash operating, investing, and financing activities | |||||||||||||||||
| Transfer of loans and leases held for investment to loans held for sale | $ | 63,508 | $ | (60,552) | $ | 2,956 | |||||||||||
| For the Six Months Ended June 30, 2024 | |||||||||||||||||
| Operating activities: | |||||||||||||||||
| Proceeds from sales of loans held for sale | $ | 577,817 | $ | (115,071) | $ | 462,746 | |||||||||||
| Net cash provided by operating activities | 174,769 | (115,071) | 59,698 | ||||||||||||||
| Investing activities: | |||||||||||||||||
| Loan and lease originations and principal collections, net | $ | (577,457) | $ | 115,071 | $ | (462,386) | |||||||||||
| Net cash used by investing activities | (664,282) | 115,071 | (549,211) | ||||||||||||||
| Net increase in cash and cash equivalents | $ | 32,909 | $ | - | $ | 32,909 | |||||||||||
| Supplemental disclosures of noncash operating, investing, and financing activities | |||||||||||||||||
| Transfer of loans and leases held for investment to loans held for sale | $ | 178,482 | $ | (114,800) | $ | 63,682 | |||||||||||
| For the Nine Months Ended September 30, 2024 | |||||||||||||||||
| Operating activities: | |||||||||||||||||
| Proceeds from sales of loans held for sale | $ | 1,003,740 | $ | (258,677) | $ | 745,063 | |||||||||||
| Net cash provided by operating activities | 365,783 | (258,677) | 107,106 | ||||||||||||||
| Investing activities: | |||||||||||||||||
| Loan and lease originations and principal collections, net | $ | (1,341,740) | $ | 258,677 | $ | (1,083,063) | |||||||||||
| Net cash used by investing activities | (1,492,878) | 258,677 | (1,234,201) | ||||||||||||||
| Net increase in cash and cash equivalents | $ | 84,045 | $ | - | $ | 84,045 | |||||||||||
| Supplemental disclosures of noncash operating, investing, and financing activities | |||||||||||||||||
| Transfer of loans and leases held for investment to loans held for sale | $ | 340,121 | $ | (257,770) | $ | 82,351 | |||||||||||
|
For the Year Ended December 31, 2024
|
|||||||||||||||||
| Operating activities: | |||||||||||||||||
| Proceeds from sales of loans held for sale | $ | 1,431,261 | $ | (390,817) | $ | 1,040,444 | |||||||||||
| Net cash provided by operating activities | 536,468 | (390,817) | 145,651 | ||||||||||||||
| Investing activities: | |||||||||||||||||
| Loan and lease originations and principal collections, net | $ | (1,835,442) | $ | 390,817 | $ | (1,444,625) | |||||||||||
| Net cash used by investing activities | (2,079,101) | 390,817 | (1,688,284) | ||||||||||||||
| Net increase in cash and cash equivalents | $ | 26,260 | $ | - | $ | 26,260 | |||||||||||
| Supplemental disclosures of noncash operating, investing, and financing activities | |||||||||||||||||
| Transfer of loans and leases held for investment to loans held for sale | $ | 475,567 | $ | (389,389) | $ | 86,178 | |||||||||||
3
| (Dollars in thousands) | As Previously Reported | Adjustment | As Adjusted | ||||||||||||||
|
For the Year Ended December 31, 2023
|
|||||||||||||||||
| Operating activities: | |||||||||||||||||
| Proceeds from sales of loans held for sale | $ | 1,362,803 | $ | (442,909) | $ | 919,894 | |||||||||||
| Net cash provided by operating activities | 620,071 | (442,909) | 177,162 | ||||||||||||||
| Investing activities: | |||||||||||||||||
| Loan and lease originations and principal collections, net | $ | (1,574,912) | $ | 442,909 | $ | (1,132,003) | |||||||||||
| Net cash used by investing activities | (1,774,922) | 442,909 | (1,332,013) | ||||||||||||||
| Net increase in cash and cash equivalents | $ | 165,904 | $ | - | $ | 165,904 | |||||||||||
| Supplemental disclosures of noncash operating, investing, and financing activities | |||||||||||||||||
| Transfer of loans and leases held for investment to loans held for sale | $ | 617,189 | $ | (438,707) | $ | 178,482 | |||||||||||
|
For the Year Ended December 31, 2022
|
|||||||||||||||||
| Operating activities: | |||||||||||||||||
| Proceeds from sales of loans held for sale | $ | 1,067,758 | $ | (425,229) | $ | 642,529 | |||||||||||
| Net cash provided (used) by operating activities | 124,485 | (425,229) | (300,744) | ||||||||||||||
| Investing activities: | |||||||||||||||||
| Loan and lease originations and principal collections, net | $ | (1,252,106) | $ | 425,229 | $ | (826,877) | |||||||||||
| Net cash used by investing activities | (1,442,344) | 425,229 | (1,017,115) | ||||||||||||||
| Net increase in cash and cash equivalents | $ | 212,886 | $ | - | $ | 212,886 | |||||||||||
| Supplemental disclosures of noncash operating, investing, and financing activities | |||||||||||||||||
| Transfer of loans and leases held for investment to loans held for sale | $ | 468,042 | $ | (421,625) | $ | 46,417 | |||||||||||
Live Oak Bancshares Inc. published this content on November 12, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 12, 2025 at 21:04 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]